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Most of the comments here are not particularly well-informed and should be ignored.

Yes, the Bitcoin Foundation (probably--I don't know anything about them other than what I've read) isn't strictly speaking a money transmitter. Yes, the California Department of Financial Institutions--which will cease to exist in 7 days when it gets merged into the California Department of Corporations--is totally ignorant of Bitcoin. But they know the law pretty well. Especially the one that they wrote. (See the name Robert Venchiarutti on the letter? He's really the one behind it. The DFI lawyers just do what they're told. They don't even like the law. Venchiarutti actually wrote it, with the help of TMSRT's lobbyists.)

That being said, the law to worry about here isn't even the one cited. It is, as I've stated quite frequently, 18 U.S.C. ยง 1960 (http://www.plainsite.org/laws/index.html?id=14426). And that law says that you don't have to be a money transmitter to get a letter such as the one received by the Bitcoin Foundation (http://www.scribd.com/fullscreen/149335233?access_key=key-2l...).

"(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business..."

The question then becomes whether the Bitcoin Foundation has any "control" or "direction" over its members and/or affiliates, who are most clearly in violation of the law under section (b). These words are vague. It could be argued that it does.

There is an extremely high chance that people will go to jail over this whether people here think it's stupid or not. It's too bad no one took me seriously when I pointed out that the MTA was going to cause problems two years ago. I've been doing the industry's dirty work ever since. It would have been a lot faster and easier with some help. Now we all have to hope that my constitutional challenge (http://www.plainsite.org/flashlight/case.html?id=716056) is going to save the day. And it might, but that day may be pretty far off in the future at the current rate.

Meanwhile, everyone should really be freaking out over AB 786 (http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?...), presently before the California Senate, which makes the MTA worse than it already is by giving Robert Venchiarutti even more power. I've been successful in removing the clause that created a new thought crime, but the rest is still pretty bad--unless you're a payroll company. Amazing what lobbying can do.

If you want to help, click on the "Comments to Author" tab at the link above, register with the State of California, and tell Assemblyman Dickinson that the MTA should be repealed for all of the reasons I outline at https://s.facecash.com/legal/20130225.packetnumbered.pdf: its overly broad scope, inability to sensibly regulate mobile technology, and unconstitutional nature. Money transmission takes place over the internet, which is in the domain of the federal government, not the states. See /ALA v. Pataki/, 969 F.Supp. 160 (1997), http://scholar.google.com/scholar_case?case=1017409488915582.... Also CC: Eileen Newhall <eileen.newhall@sen.ca.gov>, Mark Farouk <mark.farouk@asm.ca.gov>, Senator Jerry Hill <jerry.hill@sen.ca.gov>, Marc Hershman <marc.hershman@sen.ca.gov>, and BCC me: Aaron Greenspan <aarong@thinkcomputer.com>. If you live in California make sure to say where. Be polite.

Reading material:

https://news.ycombinator.com/item?id=5308013




A few notes about Aaron: while I agree with his perspective that Money Transmission should be a Federal issue, not a state issue,

A) He's not a lawyer;

B) He's (or at least Think Computer) is cheerfully suing a bunch of Bitcoin and Silicon Valley companies (including one I founded) over these laws, costing many startups litigation defense fees.

I do not consider him to be anything like a balanced commentator on these issues, and I also do not believe his approach to be one that is, on balance, helping California technology companies who wish to deal with payments.


>I do not consider him to be anything like a balanced commentator on these issues, and I also do not believe his approach to be one that is, on balance, helping California technology companies who wish to deal with payments.

Why not argue against the argument rather than the man? Or at least if we're arguing against men, follow up with "a few notes about Peter" so I can get a decent comparison of the men.


I don't think the words are vague, I think they clearly exclude the Bitcoin Foundation, just as they would exclude a company selling software to a bank.

But even if you think they're vague, that would still be the end of the matter as far as criminal law is concerned. Ambiguous statutes are construed in favor of the defendant.


Nice to see that HN is still the kind of place where a post from someone knowledgeable (whatever one may think of the details of their post) will quickly jump to the top.


Thought crime?


See http://www.aarongreenspan.com/writing/essay.html?id=86.

"(a) Whenever the commissioner believes from evidence satisfactory to the commissioner that any person has violated or is about to violate a provision of this division, or a provision of any order, license, decision, demand, requirement, or any regulation adopted pursuant to this division, the commissioner may, in the commissioner's discretion, bring an action, or the commissioner may request the Attorney General to bring an action in the name of the people of the State of California, against that person to enjoin that person from continuing that violation or doing any act in furtherance of the violation. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and other ancillary relief may be granted as appropriate."

So, all they would have needed was "evidence satisfactory to the commissioner" that you were "about to violate a provision of this division, or a provision of any order, license, decision, demand, requirement, or any regulation adopted pursuant to this division" in order to refer you to the U.S. Attorney. The California Attorney General wouldn't be involved in federal prosecution.

This section (formerly proposed Section 2155) is gone now because I threw a fit. No one else did. I find that depressing.


Well let's get our dystopias straight. That's precrime, not thoughtcrime. :)

Seriously though, I am not a lawyer - isn't that what injunctions are for? To get a judge (or in this case, the A-G) to put the brakes on something that might cause irreparable harms, in advance of a final ruling?




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